Is Your Financial House in Order?

By Dr. William “Marty” Martin
    Since the dot.com bust of 2000 and the most recent financial crisis of 2008, I have learned the importance of getting your financial house in order. This means more than opening a bank account, retirement account, and investment account. It means even more than making sure that you are protected against catastrophic risks and ensuring that your estate planning documents are in order.
    Getting your financial house in order means taking a closer look at the foundation of upon which your house is constructed. Is the foundation steady and weather resistant? Can the foundation withstand the winds of life? A volatile stock market can take a toll on your finances, but so can volatile relationships and sudden life shocks such as illness, disease, or disability. These life shocks are known to some as “Money Shocks.” A sensible strategy for withstanding “Money Shocks” is to plan for them hoping that they never come, but knowing that if they do you are more prepared to absorb the shock because your foundation is solid and your financial house is in order.
    There are also “Sudden Money” events. A “Sudden Money” event occurs when you have a financial windfall resulting from an inheritance, settlement, or a lump sum distribution from your retirement account. To navigate through both a “Money Shock” and “Sudden Money” event, you need to make sure that your financial house is in order, and that you redecorate and remodel from time to time to make room for the new events that take place—both the expected and unexpected as well as desired and not desired.
    As you grow older and accumulate more assets, material possessions, and other “stuff” in your life, it is important to do some spring cleaning now and then. Challenge yourself to throw out the old things that you do not value and make room to bring in the new.

Several practical tips to spring clean your financial house include the following:
• Dispose of all electronic and paper statements from banks, retirement accounts, and investment accounts that you do not need.
• Rebalance your portfolio to adjust to changes in the markets and changes with regard to your life goals and plans.
• Update any documents such as beneficiaries and estate planning documents to account for changes in your life.

    If you are not in the mood for spring cleaning, then challenge yourself to simplify and focus on abundance and prosperity without falling into the trap of believing that abundance and prosperity only result from accumulating more. I have found in my experience that it is much easier to focus on abundance and prosperity when you clear away the mental clutter, physical clutter, and stuff clutter. You may not enjoy the process of de-cluttering but I am confident that you will breathe easier and feel lighter after “getting rid of junk.”